Settlement Fund opposes the payment of the Villagomez estate’s bank loan | News

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THE Estate of Manuel Villagomez and its administrator, Colleen V. Manglona, ​​through attorney Robert T. Torres, asked the Superior Court to approve the partial distribution of funds from the estate to pay City Trust Bank $28,307.50 for the deceased’s unpaid and delinquent loan.

But the NMI Settlement Fund and its administrator, Joyce Tang, represented by attorney Nicole Torres-Ripple, opposed the estate’s petition.

They said the NMISF claim had priority and City Trust Bank paid “preferential treatment of one creditor over another in the same class and a claim due and payable over a claim not due”.

NMISF also said the estate’s motion is premature because NMISF’s emergency motion for a temporary stay of proceedings is pending in court.

But Torres said NMISF’s reading of applicable law or 1 CMC §2925 is incorrect. Under the plain meaning of the statute, Torres said the order or payment of claims is only triggered “if the applicable assets of the estate are insufficient to pay all claims in full.”

NMISF cites 1 CMC §2925 for the proposition that NMISF has priority over the claim or debt of City Trust Bank.

“The trustee is misinterpreting the conditional clause of the payment preference order,” Torres said. “In the case of this estate, there are more than enough assets to pay all claims in full, including the disputed and reduced NMISF claim of $12,717.73. The estate receives income from the property rented from the estate in excess of $1,000 per month. The estate has several properties which, if sold, would be more than enough to pay all claims in full. That really ends the investigation.

Torres said City Trust Bank is a secured creditor holding a mortgage on leased property which is a real estate asset.

“It’s a priority and it’s secure,” he added. “If the estate is in default on the loan due to non-payment, which is currently the case but for the consideration of City Trust Bank, then City Trust Bank may declare default and declare the full amount of the loan due and payable.”

Torres added: “The administrator is seeking court consent to pay City Trust Bank as they are a secured creditor who have not been paid…. In addition to this and contrary to the request of NMISF, failure to pay the City Trust Bank loan has consequences for the estate and heirs: seizure of the mortgaged property which is the same property for which the estate receives the income tenants of the existing lease. ”

Torres said: “If the trustee had been diligent in providing the deceased with his appeal rights while alive, we would not be in this situation. The other good reason to pay City Trust Bank is to stop the estate tax bite with interest accruing. How is this not in the best interest of all involved? Least interest and absence of default ensures that any creditor (if indeed a creditor) such as plaintiff NMISF would be paid. While she is asking for the disposition of the assets of the succession and the payment of a debt of the succession, the administrator is rightly asking this court for such authorization. »

Torres noted that the Superior Court did not grant NMISF’s motion to stay proceedings, he said.

Similarly, the NMI District Court did not grant and in fact refused to grant the trustee’s request to stay proceedings in Superior Court, Torres said.

“The trustee also objects to the payment to City Trust Bank as premature because it has an emergency motion pending for the temporary stay of proceedings. Indeed, it is and we have a status conference on May 19, 2022 on this motion,” Torres said.

“But the trustee misses the point: This court did not grant this emergency motion for temporary stay, but instead ordered the parties to attend an informational schedule about the motion.

“The trustee also confuses his motion for a stay with the administrator’s request to pay City Trust Bank. These are entirely separate issues. The trustee’s motion for a stay is based on his desire that the judgment of the deceased’s appeal or dispute regarding NMISF’s claim either through its administrative proceedings and not in this court.

“What the trustee is not telling the court is this: The NMI District Court has indicated that it will and has granted the trustee’s request to compel the administrator to follow the administrative process in the settlement agreement. settlement in Johnson v. Inos. However, the trustee also does not inform the court that the NMI District Court has refused to grant his motion for a stay of proceedings in the Superior Court. In other words, the administrator must go through the administrative appeal process but is not precluded from moving forward to the Superior Court as to the remainder of the probate proceeding.

Torres said the administrator of Villagomez’s estate proceeded to file the estate’s inventory and continued to work to settle the estate’s debts.

“The trustee says the administrator’s motion to pay City Trust Bank is ‘premature,'” Torres said.

“How is it so? The estate is in arrears on the loan and interest is accumulating. Does the trustee want the administrator to invite a foreclosure action, accrue more interest, and now charge more court fees or fees to process a foreclosure action?

“The trustee forgets that the administrator also has a fiduciary duty towards other creditors and heirs.

“What is the prejudice suffered by the trustee when, since the beginning of these proceedings, she reduced her claim from more than $56,000 to more than $19,000 and now to more than $12,000?

“In the meantime, the City Trust Bank loan is accumulating and increasing in liability and risk of default.

“That’s why the trustee is asking for this court’s approval – to protect the assets from the risk of loss and reduce the costs to the estate. The question is not what the trustee wants or that she gets what she wants like she would in court, but rather what is in the best interest of this estate probate process.”

Torres said NMISF would be willing to stipulate the use of estate money “to update the City Trust Bank account.”

“But updating the account is only a temporary solution,” he added. “The interest would keep accumulating and then the administrator would have to keep coming back to this court for monthly payments after being in default. What kind of suggestion is that, except maybe trying to bully the administrator to yield to the trustee’s claim as a condition of agreeing to pay City Trust Bank?”

Torres said her client “will not be obligated to accept any claim that she asserts in good faith as being statute-barred and of which the trustee is notified.”

Paying City Trust Bank as soon as possible is in the best interests of the estate, including NMISF, even if they can’t or won’t see it, he added.

“The court has not yet heard from the heirs or the City Trust Bank on this issue – suffice it to say that they disagree with the views or suggestions of the trustee. The Court may hear them on the issue in due time,” Torres said.

The NMI Settlement Fund has a claim against the estate of Manuel Villagomez based on an overpayment of pension benefits paid before his death.

The deceased, Manuel B. Villagomez, died on May 10, 2021 and was a member of the Settlement Class at the time of his death.

The NMI Settlement Fund declared it to be an estate creditor and timely filed a Notice of Claim in the probate action in Superior Court on November 1, 2021.

NMISF seeks, among other things, an order prohibiting the estate administrator from asserting any claim or defense, or seeking any relief related to the settlement agreement and the claim of the settlement fund against the deceased Manuel B Villagomez in any court other than the NMI. District court.

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